VIVE L’AVANTAGE

On September 7th and 23rd 2010 French workers staged nationwide strikes against the government’s plans to increase the retirement age from 60 to 62 (most developed countries are already at 65 or 67, see ”Vive La France” posted June 25, 2010). The French Left claim that these were the biggest strikes since the 2003 “manifestations”, also against pension reform, when about 2.5 million took to the streets in 220 different demonstrations throughout France. More strikes are planned throughout the rest of 2010.

It is claimed that most people in France oppose the governments pension proposal as they say that “… a decent pension is a right for older workers, and a way to open jobs and careers for younger workers …”.(Workers World September 17, 2010).

But is this really what it is all about?

I have a belief that this opposition to the pension reforms (which are quite minimal) have really very little to do with these stated altruistic reasons.

I believe that the real reasons have more to do with what the French call “l’avantage” (advantage).

I do not believe that the majority of people in France are so incredibly concerned with having the official retirement age increased by an additional 2 years, as today very few actually work till 60 anyway, the majority retiring closer to 55 than to 60. In France only 51% of workers are still employed at 55-59 (69% in UK) and only 12% at 60-65 (40% in UK). (Source: OECD Pensions at a glance 2005, HRS, ELSA and SHARE)

I believe that the problem is that in a socialist state, people worry more about whether someone else is getting some advantage that they are not, rather than about what the true effect of any change actually means to them personally. The problem is that everyone in France knows of people who were able to retire under a pension system that was theoretically based on having to work 2 years less than is now proposed, and that means that these people have gained an advantage over those that have not yet retired.

The fact that conditions have changed dramatically over the last 50 years, (with life expectancy having risen by 12 years in that time) and that the 60 year retirement age was initially set back in 1982, is irrelevant to the strikers.

The evident reality that the current pension conditions are unsustainable financially (also true with retirement at 62) is also irrelevant to them. French Labour Minister Eric Woerth said “If we don’t modify our pension plan, then tomorrow there will be no money left to pay the French pensions”.

The only relevancy to the strikers is that Jacques will now, in theory, have to work 2 more years than did Pierre his slightly older friend, and that this advantage is unacceptable in France.

The maths is simple.

If the average true retirement age in France is about 55, and if the life expectancy for those who actually do reach retirement age is about 85 (remembering that the overall average life expectancy of 80 in France includes those that die before 55), then this means that the length of work and the length of retirement are now almost the same.

There is no taxation system in the world that can support this, no matter how much you “Soak the Rich” (Socialist Manifesto in French National Elections in 2007), particularly as the rich are mainly the ones who are retiring, and who are leaving the country for tax havens like Mauritius and Andorra in increasing numbers when they do so, to escape the current tax system.

This whole culture of “l’avantage” doesn’t just apply to the retirement age. It is the same attitude that drives the habit of denouncements in France, where neighbours inform on each other to the authorities when one believes that the other is benefiting somehow in a way that he is not. It includes situations where someone burns their garden rubbish pile on September 14th, one day before the legal date, and the fire brigade is summonsed by a neighbour even though it is raining that day, or the water board is advised that someone is hand watering some plants when water restrictions have been imposed, even though the water is being pumped from an underground spring and is not coming from the mains supply.

The problem with this attitude is that it is based on trying to pull everyone down to the lowest common level possible, French wealth tax being another such instrument. Countries that are more successful are those, like Singapore, that understand that for the betterment of all their people it is ultimately more sensible to try and raise everyone’s standards as high as possible.

I do strongly believe that it is the responsibility of every country to look after those that have no real ability to look after themselves, but not those that just want to be looked after by the state because they can’t be bothered working any longer.

The right to work is a privilege, as many people unfortunately are discovering in these new economic realities, rather than something that you discard just to get your “turn at the trough”.

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2 Responses to VIVE L’AVANTAGE

Les, The real danger here is inflation! If these massive global unfunded pension liabilites start to rise due to increases in the price level (as they are inflation indexed) we would soon get into an even more catastrophic state of financial meltdown. If they were rewriting the Bible today they would definetly rewrite the chapter called The Prodigal Son – The new version would be ‘The Prodigal Dad’ – In this story the Dad goes off with his firends, spends up large on consumer goods, luxury travel and parties the nights away. Suddenly he is too old to work and there is nothing left for him to live off so heads over to his son’s house to ask if his son will take him in, feed him, clothe him and look after him in older age otherwise it is the streets. The son says yes if he is a nice son as the state pension system is so bankrupt !!

Hi Sean,
I have been saying for years that I intend to live long enough to be a burden on my children … guess I won’t be the only one. The only question is whether the children will still have jobs themselves so they can afford to look after us all.
Les